Square 1 Financial Inc (NASDAQ:SQBK) Investor Filed Lawsuit Over Alleged Wrongdoing In Acquisition

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Company Name(s): 
Square 1 Financial
Case Name: 
Square 1 Financial Deal Case 04/02/2015
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: SQBK
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
04/02/2015
Summary: 

April 07, 2015 (Shareholders Foundation) - An investor, who currently holds shares of Square 1 Financial Inc (NASDAQ:SQBK), filed a lawsuit in effort to stop the proposed takeover of Square 1 Financial Inc. by PacWest Bancorp.

The plaintiff alleges that the defendants breached their fiduciary duties owed to NASDAQ:SQBK stockholders by agreeing to sell Square 1 Financial Inc. too cheaply via an unfair process to PacWest Bancorp

On March 2, 2015, PacWest Bancorp and Square 1 Financial, Inc. (Nasdaq:SQBK) announced the signing of an agreement and plan of merger whereby PacWest will acquire Square 1 in a transaction valued at approximately $849 million. Under the terms of the Agreement, Square 1 stockholders will receive 0.5997 shares of PacWest common stock for each share of Square 1 common stock. The total value of the per share merger consideration, based on the closing price of PacWest common stock on February 27, 2015, of $45.84 is $27.49 per NASDAQ:SQBK shares.

However, the plaintiff claims that the proposed consideration NASDAQ:SQBK shareholders will receive is grossly inadequate and undervalues Square 1 Financial Inc. Square 1 Financial Inc reported that its Net Income rose from $5.35 million in 2011 to $49.83 million in 2014. Shares of Square 1 Financial Inc (NASDAQ:SQBK) increased from $17.33 per share in October 2014 to as high as $28.70 per share on February 26, 2015. In addition, the plaintiff claims that the process is also unfair to NASDAQ:SQBK stockholders.